Ghana Banking Survey 2010

Ghana Association of Bankers
Risk Management in well

Capitalised Banks
PwC
Disclaimer
This report - Ghana Banking Survey 2010 – is a joint collaboration of PricewaterhouseCoopers (PwC) and the Ghana Association of Bankers
(GAB). It aims to provide general information on Ghana’s formal banking sector and the performance of banks operating in the country for the
period between 2007 and 2009. The survey does not purport to provide answers to all possible questions and issues pertaining to the country’s
banking industry. Neither does it constitute an invitation to trade in the securities of the banks covered in the survey.
The banks’ annual reports and audited financial statements for the years 2007 to 2009 were our principal sources of information. While we
acknowledge that our sources of information are reliable, we provide no guarantees with respect to the accuracy and completeness of the
information contained therein.
We will therefore not accept any responsibility or liability for any errors, omissions, or mis-statements that this report may contain. Neither will we
accept any responsibility or liability for any loss or damage, howsoever occasioned, to any person, body corporate or organisation of any form
relying on any statement or omission in this report.
2
Ghana Banking Survey 2010
Contents
Disclaimer 2
List of abbreviations 4
Participating banks 5
Introduction 6
Risk management in well capitalised banks 8
Overview - the economy 12
Overview - the industry 16
Quartile analysis 18
Market share analysis 31
Profitability and efficiency 35
Return to shareholders 38
Asset quality 40
Liquidity 43
Glossary of key financial terms, equations and ratios 46
Our profile 48
3
List of abbreviations
ABG Access Bank (Ghana) Limited IFRS International Financial Reporting Standards
ABL Amalgamated Bank Limited IMF International Monetary Fund
ADB Agricultural Development Bank Limited MBG Merchant Bank Ghana Limited
Baroda Bank of Baroda Limited NIB National Investment Bank Limited
BBGL Barclays Bank of Ghana Limited PAT Profit after tax
BOG Bank of Ghana PBL Prudential Bank Limited
BSIC Sahel -Sahara Bank Limited PBT Profit before tax
CAL CAL Bank Limited PwC PricewaterhouseCoopers (Ghana) Limited
DPS Dividend per share ROA Return on assets
EBG Ecobank Ghana Limited ROCE Return on capital employed
EPS Earnings per share ROE Return on equity
FAMBL First Atlantic Merchant Bank Limited SCB Standard Chartered Bank Ghana Limited
FBL Fidelity Bank Limited SG-SSB SG-SSB Bank Limited
GCB Ghana Commercial Bank Limited Stanbic Stanbic Bank Ghana Limited
GDP Gross Domestic Product TTB The Trust Bank Limited
GTB Guaranty Trust Bank (Ghana) Limited UBA United Bank for Africa (Ghana) Limited
HFC HFC Bank (Ghana) Limited UGL UniBank Ghana Limited
IBG Intercontinental Bank (Ghana) Limited UTB UT Bank Limited
ICB International Commercial Bank Limited ZBL Zenith Bank (Ghana) Limited
PricewaterhouseCoopers in
collaboration with
Ghana Association of Bankers 4
Participating banks
25 out of the 26 banks currently operating in the country participated in this year’s survey as listed in the table
below.
Year of Majority Number of
Name of bank incorporation ownership branches Chief Executive Officer( as at May 2010)
Access Bank (Ghana) Limited 2008 Foreign 2 Daniel Akaba
Agricultural Development Bank Limited 1965 Local 56 Stephen Kpordzih
Amalgamated Bank Limited 1997 Foreign 19 Menson Torkornoo
Bank of Baroda (Ghana) Limited 2007 Foreign 1 V. Sreedharan
Barclays Bank of Ghana Limited 1917 Foreign 83 Benjamin Dabrah
BSIC (Ghana) Limited 2008 Foreign 10 Robert Kow Bentil
CAL Bank Limited* 1990 Local 14 Frank Adu Jr.
Ecobank Ghana Limited* 1990 Foreign 48 Samuel Ashitey Adjei
Fidelity Bank Limited 2006 Local 17 Edward Effah
First Atlantic Merchant Bank Limited 1994 Local 6 Jude Arthur
Ghana Commercial Bank Limited* 1953 Local 157 Simon Dornoo
Guaranty Trust Bank (Ghana) Limited 2004 Foreign 18 Dolapo Ogundimu
HFC Bank Ghana Limited* 1990 Local 23 Asare Akuffo
Intercontinental Bank Ghana Limited 2006 Foreign 22 Albert Mmegwa
International Commercial Bank Limited 1996 Foreign 12 Sanjeev Anand
Merchant Bank Ghana Limited 1971 Local 22 Peter Illiasu
National Investment Bank Limited** 1963 Local 27 P.A. Kuranchie
Prudential Bank Limited 1993 Local 21 Stephen Sekyere Abankwa
SG-SSB Bank Limited* 1975 Foreign 40 Alain Bellissard
Stanbic Bank Ghana Limited 1999 Foreign 22 Alhassan Andani
Standard Chartered Bank Ghana Limited* 1896 Foreign 22 Hemen Shah
The Trust Bank Limited 1996 Local 20 Larry Yirenkyi Boafo
UniBank (Ghana) Limited 1997 local 13 Ammishadai Owusu-Amoah
United Bank for Africa (Ghana) Limited 2004 Foreign 25 Gabriel Edgal
UT Bank Limited 1995 Local 10 Prince K. Amoabeng
Zenith Bank (Ghana) Limited 2005 Foreign 16 Daniel Asiedu
* These b anks have their shares listed on the Ghana Stock Exchange (GSE)
** This b ank did not participate in this year's survey
collaboration with 5
Introduction
Dear reader
It is our pleasure to share with you the results of the 2010 annual We thank you for your continued support and patronage. We
banking survey. Of the 26 licensed banks in Ghana, 25 participated particularly note and appreciate the roles of the participating
in the survey. banks in this survey, as well as Ghana Association of Bankers
and Bank of Ghana.
A number of banks have already complied with the minimum capital
requirement mandated by Bank of Ghana with others planning on PricewaterhouseCoopers is proud of its achievements in
achieving the set target by end of 2012. The focus of this year’s helping to shape the banking industry in Ghana.
survey is a review of how these banks are managing risks in the
wake of increased capitalisation. In the last three years, the
industry’s total shareholders funds have more than doubled from
GH¢0.8 billion to GH¢1.8 billion as banks inject new capital and
PWC
retained earnings to meet the minimum capital requirements.
Section one of this report focuses on exposures arising from

growth in the Ghana banking industry. An overview of the industry
and the macro-economic environment in which banks operated
follows in Section two. The third section presents the performance
indicators we have identified as key in the banking industry from
2007 to 2009. The fourth and subsequent sections provide a
commentary on the changes in the rankings of banks in the
industry.
It is our hope that this publication continues to inform and engender

useful discussions amongst policy makers, regulators, banks and
the business community at large.
Risk management in well
capitalised banks
Banking executives are trying to avoid being blindsided
The after effects of the global economic crisis continue to reverberate Percent of directors responding to what keeps
through corporate boardrooms, bringing risk management into them up at night
sharper focus. In the 2009 “What Directors Think” survey conducted
by PricewaterhouseCoopers and Corporate Board Member
magazine, risk management was clearly of primary concern to
directors.
Unacceptable business practices
coming to light
What keeps directors up at night? In the survey, 60% of 1,021
respondents said unknown risks represent the greatest challenge
they face as directors. It comes as no surprise, that risk management
merits the most attention from the board: 64 % of directors ranked it
Personal liability
the highest priority after the board’s core mission of profitability and
shareholder value. Two-thirds indicated they would like to spend
more time on risk management this year than in past years.
. Ability of the CEO to manage
Chief Executives of banks, and board members alike are asking the through current challenges
same questions. Could any of the problems experienced by some of
the world’s biggest banks happen to us? How is it possible that the
global banking industry had record write-offs and suffered the results
of risk surprises, even though many of these banks have generally Unknown Risks
been viewed as good risk managers or “best practise” institutions?
At the same time, these executives are wondering “do we truly

understand and effectively manage our risks and achieve growth?” 0 10 20 30 40 50 60 70
While there are important lessons to be learned from the recent
turmoil, banks also have an opportunity to turn good risk Source: PricewaterhouseCoopers and Corporate Board Member
management into a true competitive advantage for growth. magazine - 2009 What Directors Think Survey
Managing risk in a changing environment
In the last five years, the Ghanaian banking and can lead to an inability to capture or The appetite for credit will increase and
industry has seen a phenomenal growth respond rapidly and successfully to banks should focus on developing an
arising from; emerging external opportunities. efficient, effective, and flexible banking
infrastructure to sustain growth and manage
• Capital injection by existing banks to The days of the loyal, life-long customer the associated risks.
meet minimum regulatory capital appear to be over. Transient customers are
requirements, generally willing to move to banks that Implementing Basel II will improve risk
• Entry of eight banks from the sub region make their customers feel valued. management
and Asia, and The new Basel Capital Accord (Basel II)
• Expansion in the branch network. Stable macro-economic trends will expected to be operational in Ghana
encourage savings. With the private sector beginning 1 January 2011 represents the
Notwithstanding this phenomenal growth, entering into the pensions market, we most significant change to the supervision of
high interest rates continues to be a major expect individual pension contributions to banks. The focus will be on establishing how
concern for borrowers. Banks are being provide another source of funds for banks. much capital a bank requires, given its risk
called upon to justify such high interest rate This will skew revenue opportunities for profile and improve risk management.
regime in the country. financial institutions toward savings and
wealth management products away from
.
The new capital requirements may lead to an lending products.
.
improved buffer for risk absorption in the
sector. However, increased competition, The current economic reforms,
growing customer demands, and new improvements in budget deficit, and the
regulations are likely to continue to add new oil find will definitely attract foreign
complexity to business models of banks and investments and lead to buoyant economic
information technology environment. These activity.
complexities may not be easily unraveled
collaboration with
Sound judgments have to be applied in striking the right balance between risk
management and growth
Managing risk in the changing environment Conclusion

Banks in Ghana need to strike the right
Banks will have to go back to common sense
balance between risk management and
risk management practices such as “know your
growth by:
counterparties”, “invest only in products you
understand”, “perform vigorous credit
• Ensuring full transparency across all risks
assessments on new customers ” and “avoid
and across the organisation,
relying exclusively on quantitative models” -
• Putting in place vigorous risk governance
sound judgments have to be applied.
structures,
• Clearly defining and complying with the
In the real world, however, it is rare that a
bank’s risk appetite, and
moment arises, brought about by a
• Instilling strong risk culture focused on
combination of unexpected events wherein
optimising return trade-offs within a
banks can take stock of their position and
defined risk strategy,
regroup. Now is just such a moment. Banks
should focus their attention on continually and
Many of the recent surprises are the result of
consciously managing their risks.
specific failures in one or even several of
these key disciplines. Applying the above
principle will improve asset quality and risk
management practises of banks.
collaboration with
Overview – the economy
The GDP growth reduced sharply from 7.3% in 2008 to 4.7% in 2009.
Economic Growth
The steady growth in GDP over the last five years slowed down in Real GDP growth rate
2009. Real GDP growth declined from 7.3% in 2008 to 4.7% in 2009,
with the average over the period being 6.1%.
7.5%
7.3%
7.0%
The agricultural sector which contributes 34% of the country’s GDP
6.5%
recorded a 6.2% growth in 2009. This growth, which was higher than 6.2% 6.3%
6.0%
expected is attributable to very good rainfall patterns during the year 5.8%
and the rise in the world market prices of cocoa by approximately 36% 5.5%
during the year. 5.0%
4.5%
4.7%
The services sector, contributing 31.8% of GDP, saw a sharp fall from 2005 2006 2007 2008 2009
its 2008 growth rate of 9.3% to about 4.6% in 2009, thus the lowest
growth rate in the past five years. This downward trend was as a result
of the “Wholesale & Retail Trade, Restaurants & Hotels sub-sector”
Source: MoFEP 2010 Budget Statement
growing by only 2.0% compared to a target of 7.0% and previous year
growth of 7.0%.
Sectoral 2005 2006 2007 2008 2009
Growth in the industry sub-sector lagged behind the other two major growth rates
sectors of the economy. Despite the upward trend of the price of gold Agriculture 6.5% 5.7% 4.3% 5.1% 6.2%
from US$821.49 in January 2009 to US$1,126.80 per ounce by Industry 5.6% 7.3% 7.4% 8.1% 3.8%
December 2009, the sector only achieved a 3.8% growth. The main Services 5.4% 6.5% 8.2% 9.3% 4.6%
reason for the reduction in growth in this sector was the contraction of
the construction sub-sector by 1% against an expected growth of 8%.
The country’s GDP growth rate reduced sharply from 7.3% in 2008 to 4.7% in 2009
Inflation
The year 2009 started with price inflation rate of 18.4%, however
inflationary pressures continued in the first half of the year and the Average inflation and interest rate
inflation rate peaked at 20.7% in June. The second half of the year
saw the inflationary pressures easing and closing the year’s inflation
rate at 15.97%. This was against the year end inflation target of 30.0%
14.6%. 27.0%
The increase in inflation in the first half of the year emanated from the 25.0% 25.0%
rise in world market prices for crude oil. At the beginning of 2009 22.3%
21.3% 21.0%
international prices of crude oil stood at US$43.29 a barrel and 20.0%
continued to rise until it peaked at US$93.10 a barrel in August. This 18.4% 18.0%
17.0%
subsequently eased to close the year at US$75.20 a barrel. 15.5% 16.0%
15.0% 14.8%
13.5%
12.7%
12.5%
11.0%
Interest rate 10.0%
2005 2006 2007 2008 2009
Over the five year period reviewed, the Bank of Ghana’s prime rate
was revised periodically as part of monetary policy measures to Average Inflation (y/y) Prime rate Interest rate (Commercial rate)
contain inflationary pressures or mop up any excess liquidity issues.
The year began with the prime rate at 17%. This was revised upwards
in March to 18.5% before being reviewed to 18% in November 2009. Source: Bank of Ghana statistics
Changes in the prime rate strongly influenced the lending rates offered
by commercial banks as banks revised their base rates in response to
these changes.
The Ghana Cedi continued to depreciate against all the major international currencies.
Between December 2008 and December 2009, the benchmark 91-

day Treasury Bill rate went down by 2% to 22.7%. Similarly, the 182- Exchange rate of major international currencies to the
day Treasury Bill rate declined by 1% to 25.3%. Ghana Cedi
2.5
The rate on the 1-year note was held constant at 20% while the 2- 2.31
year note increased by 2.5% to 23.5%. The rate on the 3-year note 2.0 2.07
1.93
was also held at 14% . 1.81 1.79
1.70
1.5 1.57
1.42 1.43
1.21 1.26
1.0
1.13
0.91 0.92 0.97
Exchange Rate
0.5
During the first three quarters of 2009 the Ghana Cedi weakened 2005 2006 2007 2008 2009
sharply and by the end of September, the Ghana Cedi had
depreciated by 16%, 32% and 24% against the US Dollar, the British US$ Euro Pound Sterling
Pound Sterling and the Euro respectively. However, the last quarter of
2009 saw the Ghana Cedi appreciate against all the major currencies
by an average of about 2%.
Overview – the industry
Introduction of the “cheque code-line clearing system” and meeting of minimum capital
requirement by foreign banks were the key milestones achieved in 2009...
In 2009 the banking industry witnessed very little activity. No new Product development
industry specific laws were enacted. The notable events that
occurred during the year are set out below. The banks launched relatively few new products. However, the
emerging trend indicates that;
Meeting the minimum capital requirement
1.Banks are focusing on product s targeted at encouraging children to
December 2009 marked the year end that all foreign banks (banks save at an early stage, and
with foreign majority ownership) were to meet the new stated
capital requirement of GH¢60 million. Of the fourteen foreign banks 2.Banks and insurance companies have teamed up to deliver liability
in the country, ten were able to comply with the requirement. based products to customers.
Local banks (banks with local majority ownership) are required to
meet the minimum capital of GH¢25 million by December 2010. As
at December 2009 six local banks had met the requirement.
Introduction of the “cheque code-line clearing system”

The Ghana Inter-Bank Payment and Settlement Systems
(GhIPSS) introduced the “cheque code-line clearing system”. This
system seeks to clear all cheques throughout the country within 48
hours, instead of the three days to three weeks. The improved
efficiency in clearing is expected to encourage the use of cheques
and reduce the use of cash.
Quartile analysis
The industry’s operating assets increased by 82% from 2007 to 2009 with UGL and UTB
more than doubling their operating assets.
Quartile Grouping Operating Assets (In billions of Cedis)

In order to ensure reasonable comparison and analysis, we
100%
grouped participating banks into quartiles based on the value of
their operating assets. We consider banks’ operating assets to be 90%
3.5 2.5 1.7
the key indicator of their capacity to do business and create
stakeholder value. On this basis we have ranked participating 80%
banks according to the value of operating assets held at 31 70%

December 2009. 1.5 1.4
60% 2.9
Despite the constraints of unfavourable macro economic trends and
the impact of the global recession the industry’s total operating 50%
assets grew by approximately 82% from about GH¢6.85 million in
40%
2007 to approximately GH¢12.42 million in 2009.
30% 5.4 3.7
5.8
20%
10%
0% 0.2 0.1 0.1

2009 2008 2007
Other Operating Assets Net Loans and Advances Liquid Assets Cash Assets
Source: Bank’s Financial Statements & PwC Analysis
Net loans and advances continued to constitute a greater proportion of industry’s

operating assets, however its growth rate declined
Trends in operating assets

Composition of operating assets
Net loans and advances remained the most significant component
of operating assets. However, the growth of 7.5% % in 2009 was
slower than the 45% growth in 2008. Cash Assets
The industry’s gross loan book grew from GH¢5.7 billion in 2008 to Liquid Assets
GH¢6.3 billion in 2009. However the gains were eroded by
impairment allowances for non-performing loans. The increased Net Loans and Advances
default has been attributed to the unfavourable macro- economic
Other Operating Assets
conditions that prevailed for most part of the year and perhaps not
so good credit decisions made by banks in prior years. This may 0% 10% 20% 30% 40% 50% 60%
have been compounded further by the accounting approach which
no longer applies a set guideline for defaults but requires banks to 2007 2008 2009
demonstrate commitment of future cash flows from borrowers.
The immediate response of the industry was a contraction in
Source: Bank’s Financial Statements & PwC Analysis
granting of new loans as banks adopted improved credit profiling
of borrowers and maintained funds in cash and risk free money
market instruments. Cash and liquid assets increased by 59% from
GH¢4.1 billion in 2008 to GH¢6.4 billion in 2009.
We have shown on the next few pages, a summary of changes in
quartile arrangements and industry operating assets rankings.
EBG, Stanbic, MBG, Fidelity, GTB, UGL, ICB and UTB increased their operating assets
by over 50%
(Thousands of Ghana Cedis)
Quartile
2009 2008 2007 Change Δ% Rank (2009) Rank (2008) Δ(Rank) Quartile(2009) Quartile(2008) Movement
GCB 1,819,507 1,578,491 1,093,864 241,016 15% 1 1 - 1 1 NONE
BBGL 1,324,394 1,275,904 1,090,078 48,490 4% 2 2 - 1 1 NONE
SCB 1,317,695 887,191 730,913 430,504 49% 3 3 - 1 1 NONE
EBG 1,275,266 793,793 604,862 481,473 61% 4 4 - 1 1 NONE
Stanbic 693,445 441,744 346,180 251,701 57% 5 6 1 1 1 NONE
MBG 677,835 418,582 443,711 259,253 62% 6 7 1 1 2 UP
ADB 635,761 529,342 394,208 106,419 20% 7 5 (2) 2 1 DOWN
ZBL 535,130 368,296 140,045 166,834 45% 8 9 1 2 2 NONE
SG-SSB 517,790 410,692 390,220 107,098 26% 9 8 (1) 2 2 NONE
CAL 430,154 314,540 219,799 115,614 37% 10 12 2 2 3 UP
IBG 374,510 267,719 85,429 106,791 40% 11 13 2 2 3 UP
Fidelity 352,631 213,417 142,826 139,215 65% 12 17 5 2 3 UP
ABL 323,999 261,868 140,467 62,131 24% 13 14 1 3 3 NONE
PBL 315,394 260,768 229,023 54,626 21% 14 15 1 3 3 NONE
TTB 301,315 243,601 205,504 57,714 24% 15 16 1 3 3 NONE
GTB 263,633 159,820 34,393 103,813 65% 16 19 3 3 4 UP
UBA 256,956 182,134 86,575 74,822 41% 17 18 1 3 4 UP
HFC 243,108 364,677 155,036 (121,569) -33% 18 10 (8) 3 2 DOWN
FAMBL 202,532 360,506 159,138 (157,973) -44% 19 11 (8) 4 2 DOWN
UGL 187,188 90,822 56,915 96,366 106% 20 21 1 4 4 NONE
ICB 166,237 95,520 73,881 70,717 74% 21 20 (1) 4 4 NONE
UTB 96,818 37,526 24,005 59,292 158% 22 22 - 4 4 NONE
ABG 84,749 - - 84,749 n/a 23 25 2 4 4 NONE
BSIC 17,057 12,231 - 4,826 39% 24 23 (1) 4 4 NONE
Baroda 15,148 10,598 - 4,550 43% 25 24 (1) 4 4 NONE
NIB - - - - n/a n/a n/a n/a n/a n/a NONE
Industry 12,428,252 9,579,783 6,847,071
The industry’s total operating assets increased by about 30% with UGL and UTB more
than doubling their operating assets
•Total operating assets of the six banks in Q1 increased by 65% from GH¢4.3 billion in 2007 to GH¢7.1 billion in 2009.
•MBG rejoined the group after its exit in 2008. ADB fell two positions in the ranking and joined Q2.
First Quartile Group
• GCB lost 1% market share but continues to lead the group with 15% of the industry’s total operating assets.
(Q1)
• Total Q2 operating assets doubled from GH¢1.4 billion in 2007 to GH¢2.9 billion in 2009.
Second Quartile •CAL, IBG and Fidelity and moved up to Q2 from Q3 in 2008.
Group (Q2) •Growth in the “older” banks within the group - ADB and SG-SSB (20% and 26% respectively).
•Q3 operating assets doubled from about GH¢0.9 billion in 2007 to GH¢1.7 billion in 2009.
Third Quartile Group •GTB and UBA moved and to Q3 from Q4.
(Q3) •HFC lost eight positions in ranking and dropped from Q2 to Q3 as its operating assets reduced by 33%
•The group’s operating assets grew from GH¢0.5 billion in 2007 to GH¢0.8 billion in 2009.
Fourth Quartile Group •Two relatively new market players ABG and BSIC joined Q4.
(Q4) •UTB and UGL have the fastest growing operating assets.
•FAMBL fell eight positions from Q2 to Q4 with its operating assets declining by 44% over the three years.
First Quartile Banks
EBG and Stanbic increased their share of industry deposits while SCB, BBGL and
GCB’s share of deposits declined. GCB continues to lead the group in overall share of
industry net advances
First Quartile Banks - Profit before tax margin First Quartile Banks - Return on equity
60% 50%
50%
40%
40%
30%
30%
20% 20%
10% 10%
0% 0%
-10% GCB BBGL SCB EBG Stanbic MBG -10% GCB BBGL SCB EBG Stanbic MBG
-20% -20%
2009 2008 2007 2009 2008 2007
First Quartile Banks - Share of industry deposits First Quartile Banks - Share of industry advances
20% 25%
15% 20%
15%
10%
10%
5%
5%
0% 0%
GCB BBGL SCB EBG Stanbic MBG GCB BBGL SCB EBG Stanbic MBG
2009 2008 2007 2009 2008 2007
First Quartile Banks
The quality of BBGL and MBG’s loans and advances declined. Except MBG cost
income ratio of banks in this group was above 50%
First Quartile Banks - Impairment allowance/gross First Quartile Banks - Cost income ratio
loans and advances
25% 90%
80%
20% 70%
60%
15% 50%
10% 40%
30%
5% 20%
10%
0% 0%
GCB BBGL SCB EBG Stanbic MBG GCB BBGL SCB EBG Stanbic MBG
2009 2008 2007 2009 2008 2007
Second Quartile Banks
ZBL holds the largest share of industry deposits in the group while ADB holds the
largest share of net advances. SG-SSB was the only bank in the group to record an
increase in profit before tax margin
Second Quartile Banks - Profit before tax margin Second Quartile Banks - Return on Equity
45% 50%
40%
35% 40%
30%
30%
25%
20% 20%
15%
10% 10%
5%
0% 0%
ADB ZBL SG-SSB CAL IBG Fidelity -10% ADB ZBL SG-SSB CAL IBG Fidelity
2009 2008 2007 2009 2008 2007
Second Quartile Banks - Share of industry deposits Second Quartile Banks - Share of industry advances
6% 8%
5% 7%
6%
4% 5%
3% 4%
2% 3%
2%
1% 1%
0% 0%
ADB ZBL SG-SSB CAL IBG Fidelity ADB ZBL SG-SSB CAL IBG Fidelity
2009 2008 2007 2009 2008 2007
Second Quartile Banks
The quality of ADB’s loan portfolio declined while ZBL improved its cost income ratio
Second Quartile Banks - Impairment allowance/gross Second Quartile Banks - Cost income ratio
loans and advances
16% 100%
14%
80%
12%
10% 60%
8%
6% 40%
4% 20%
2%
0% 0%
ADB ZBL SG-SSB CAL IBG Fidelity ADB ZBL SG-SSB CAL IBG Fidelity
2009 2008 2007 2009 2008 2007
Third Quartile Banks
ABL and PBL hold the highest share of industry deposits and advances respectively
among the Q3 banks while GTB fully recovered its operation cost...
Third Quartile Banks - Profit before tax margin Third Quartile Banks - Return on equity
60% 60%
40% 40%
20% 20%
0%
0%
-20% ABL PBL TTB GTB UBA HFC
-20% ABL PBL TTB GTB UBA HFC
-40%
-40% -60%
-60% -80%
-80% -100%
2009 2008 2007 2009 2008 2007
Third Quartile Banks - Share of industry deposits Third Quartile Banks - Share of industry advances
4% 4%
4% 3%
3% 3%
3%
2%
2%
2%
2%
1% 1%
1% 1%
0% 0%
ABL PBL TTB GTB UBA HFC ABL PBL TTB GTB UBA HFC
2009 2008 2007 2009 2008 2007
Third Quartile Banks
The quality of assets of the Q3 banks declined with all banks recording an increase in
loan impairment allowances
Third Quartile Banks - Impairment allowance/ gross Third Quartile Banks - Cost income ratio
loans and advances
14% 180%
12% 160%
140%
10% 120%
8% 100%
6% 80%
4% 60%
40%
2% 20%
0% 0%
ABL PBL TTB GTB UBA HFC ABL PBL TTB GTB UBA HFC
2009 2008 2007 2009 2008 2007
Fourth Quartile Banks
FAMBL leads the group in terms of deposits. UGL significantly increased its share of the
industry deposits
Fourth Quartile Banks - Profit before tax margin Fourth Quartile Banks - Return on equity
100% 100%
50%
50%
0%
-50% FAMBL UGL ICB UTB ABG BSIC Baroda 0%
-100% FAMBL UGL ICB UTB ABG BSIC Baroda
-50%
-150%
-100%
-200%
-250% -150%
2009 2008 2007 2009 2008 2007
Fourth Quartile Banks - Share of industry deposits Fourth Quartile Banks - share of industry advances
4%
5% 3%
4% 3%
2%
3%
2%
2%
1%
1% 1%
0% 0%
FAMBL UGL ICB UTB ABG BSIC Baroda FAMBL UGL ICB UTB ABG BSIC Baroda
2009 2008 2007 2009 2008 2007
Fourth Quartile Banks
UTB’s impairment allowance to gross loans and advances improved over the past three
years ... Except Baroda the cost income ratio worsened
Fourth Quartile Banks - Impairment allowance / gross Fourth Quartile Banks - Cost income ratio
loans and advances
35% 350%
30% 300%
25% 250%
20% 200%
15% 150%
10% 100%
5% 50%
0% 0%
FAMBL UGL ICB UTB ABG BSIC Baroda FAMBL UGL ICB UTB ABG BSIC Baroda
2009 2008 2007 2009 2008 2007
Market share analysis
Industry’s total assets grew by 30% between 2008 and 2009; GCB and BBGL were the
biggest losers but continued to lead…
Share of industry total assets Share of industry total assets

Despite contributing less than 4% of the
industry’s total assets, UGL, ICB and UTB 2009 R 2008 R 2007 R
The total assets of the industry grew from GCB 14.3% 1 15.9% 1 15.6% 2
GH¢ 10.3 billion in 2008 to GH¢ 13.4 billion in are growing rapidly and more than doubled
BBGL 10.8% 2 13.4% 2 16.2% 1
2009. GCB and BBGL maintained their lead their operating assets during the year. SCB 10.5% 3 9.5% 3 10.5% 3
rankings at the top spot but together lost 4.3% EBG 10.1% 4 8.5% 4 8.8% 4
market share. They had met the minimum ADB 5.5% 5 6.0% 5 6.4% 5
capital requirement at the end of the year. Stanbic 5.3% 6 4.4% 6 4.8% 8
GCB grew organically through value created MBG 5.2% 7 4.3% 7 6.3% 6
from their operations. SG-SSB 4.3% 8 4.2% 8 5.7% 7
ZBL 4.1% 9 3.8% 9 2.1% 14
CAL 3.4% 10 3.2% 12 3.2% 10
The other banks in Q1 were the industry’s big
IBG 3.2% 11 2.9% 14 1.4% 17
gainers. At various times during the year EBG, Fidelity 2.7% 12 2.1% 17 2.0% 16
SCB and Stanbic raised capital through public ABL 2.6% 13 2.9% 13 2.0% 15
offers, rights issue and private placements PBL 2.5% 14 2.7% 15 3.3% 9
amounting to GH¢175 million. TTB 2.3% 15 2.4% 16 3.0% 11
FAMBL 2.2% 16 3.6% 11 2.3% 12
HFC and FAMBL were the most challenged in GTB 2.1% 17 1.7% 19 0.6% 21
loosing market share of operating assets. UBA 2.0% 18 1.9% 18 1.3% 18
These banks lost almost 50% of their market HFC 1.9% 19 3.6% 10 2.2% 13
UGL 1.6% 20 1.1% 20 1.0% 20
share and slipped from quartile 2 grouping in
ICB 1.4% 21 1.0% 21 1.1% 19
2008 to quartile 3 and 4 respectively in 2009.
UTB 0.8% 22 0.4% 22 0.4% 22
ABG 0.7% 23 N/A N/A
HFC’s loss of market share was mainly BSIC 0.2% 24 0.1% 23 0.0% 23
attributable to a significant reduction in cash Baroda 0.1% 25 0.1% 24 0.0% 23
assets. NIB N/A N/A N/A
Industry 100.0% 100.0% 100.0%
GCB, BBGL,SCB, EBG and Stanbic account for more than 51% of the industry’s total
deposits
Share of industry deposits Share of industry deposits

2009 R 2008 R 2007 R
The industry shows a strong growth in EBG and Stanbic gained 3% market share GCB 13.3% 1 14.8% 2 16.3% 2
deposits during the year. Between 2008 in deposits. FAMBL (Q4), UBA (Q3), GTB BBGL 12.1% 2 15.7% 1 18.6% 1
and 2009 deposits grew by 25% from (Q3) and ICB (Q4) lost their previous EBG 10.5% 3 8.7% 4 8.9% 4
year’s market shares. FAMBL was the SCB 8.9% 4 9.9% 3 10.5% 3
GH¢7.6 billion in 2008 to GH¢9.5 billion in
hardest hit. The bank’s total deposits Stanbic 6.2% 5 4.9% 5 4.8% 8
2009. Between 2007 and 2008 the MBG 5.4% 6 4.2% 9 5.8% 5
industry only achieved a 10% increase declined by 22% between 2008 to 2009
ZBL 4.9% 7 4.4% 6 2.6% 11
from GH¢ 6.8 billion to GH¢7.6 billion. from GH¢67.4 million in 2008 to GH¢ 20.5
ADB 4.5% 8 4.2% 8 4.9% 7
million in 2009. SG-SSB 4.1% 9 3.9% 10 5.1% 6
GCB outperformed BBG and now holds IBG 3.5% 10 3.5% 11 1.5% 18
the largest share of the industry’s BSIC, ABG and Baroda are yet to ABL 3.2% 11 3.4% 12 2.3% 12
deposits. The two banks leveraged on establish a strong market presence. Fidelity 3.1% 12 2.1% 17 2.2% 14
their extensive branch network to mobilise CAL 2.9% 13 2.3% 16 2.3% 13
deposits. Their relative rankings are not FAMBL 2.7% 14 4.4% 7 1.8% 15
PBL 2.7% 15 2.6% 13 3.2% 9
surprising as they operate the largest
TTB 2.4% 16 2.3% 15 2.8% 10
number of branches in the industry. In UBA 2.1% 17 2.5% 14 1.6% 16
total, the number of branches for both UGL 2.0% 18 1.2% 20 1.0% 20
banks accounted for 45% of the industry’s GTB 1.9% 19 2.1% 18 0.6% 21
branches in 2009. HFC 1.5% 20 1.4% 19 1.5% 17
ICB 0.9% 21 1.0% 21 1.1% 19
Notwithstanding SCB’s 12% increase in UTB 0.9% 22 0.3% 22 0.4% 22
its total deposits in 2009, the bank’s BSIC 0.2% 23 0.1% 23 0.0% 23
market share fell by 1% and lost its third ABG 0.1% 24 N/A N/A
place to EBG in 2009. Baroda 0.1% 25 0.0% 24 0.0% 23
NIB N/A N/A N/A
Industry 100.0% 100.0% 100.0%
The 11% growth in industry’s gross loan book is the slowest in the last three years
Share of industry gross loans and advances

Share of industry advances
2009 R 2008 R 2007 R
2009 had the slowest growth in industry loans The investment decisions of these banks GCB 21.7% 1 20.1% 1 20.2% 1
and advances over the last five years. Gross appear to be more conservative as BBGL 8.8% 2 13.3% 2 17.2% 2
loans and advances grew by 11% in 2009 government securities held by them banks EBG 7.7% 3 7.3% 4 7.8% 3
compared to 47% in 2008. Banks were more increased from GH¢390 million in 2008 to SCB 7.0% 4 8.5% 3 7.7% 4
cautious in lending because of the heightened GH¢985 million in 2009. ADB 6.4% 5 6.8% 5 6.2% 6
MBG 5.8% 6 5.7% 6 7.6% 5
credit risk from uncertain macro-economic
Overall, none of the banks gained more than SG-SSB 5.1% 7 5.3% 7 5.7% 7
conditions.
Stanbic 4.5% 8 4.5% 8 5.3% 8
two percentage points on their previous
GCB continued to be the dominant lender in CAL 3.7% 9 3.5% 9 3.1% 10
year’s share of the industry’s loans and IBG 3.6% 10 3.2% 10 1.0% 17
the industry, with a concentration of its loan advances. Fidelity, however, made
book in the Commerce and Finance sector. ZBL 3.2% 11 2.5% 15 1.7% 15
impressive gains having doubled the size of PBL 3.2% 12 2.9% 13 3.1% 9
BBGL maintained its second ranking over the its gross loans and advances. Fidelity 3.0% 13 1.6% 17 0.9% 18
three year period. However its share of the TTB 3.0% 14 3.0% 12 2.9% 11
industry’s advances has declined over the . ABL 2.8% 15 2.2% 16 1.9% 13
same period. HFC 2.7% 16 2.6% 14 2.8% 12
UGL 1.9% 17 1.2% 18 1.0% 16
BBGL and SCB perhaps had the lowest GTB 1.8% 18 0.8% 19 0.3% 21
lending appetites, with their gross book FAMBL 1.5% 19 3.2% 11 1.8% 14
shrinking by 20% and 8% respectively in 2009. UTB 0.8% 20 0.5% 22 0.3% 22
Their allowance for impairment increased by UBA 0.7% 21 0.7% 20 0.8% 19
71% and 115% respectively. ICB 0.6% 22 0.6% 21 0.7% 20
ABG 0.2% 23 N/A N/A
BSIC 0.1% 24 0.0% 23 0.0% 23
Baroda 0.1% 25 0.0% 24 0.0% 23
NIB N/A N/A N/A
Industry 100.0% 100.0% 100.0%

.
Profitability and efficiency
The industry Profit Before Tax margin declined from 30.4% in 2007 to 19.7% in 2009
Profit before tax margin

Profit margins
2009 R 2008 R 2007 R
Over the survey period, the industry profit The loan profitability of GTB’s loan book Baroda 57.8% 1 39.5% 4 0.0% 21
improved from 10.6 % in 2007 to 19.3% in EBG 46.1% 2 41.9% 1 48.2% 3
before tax has declined from 30.4% in 2007 to
2009. Further the bank also appears to SCB 45.9% 3 37.4% 7 46.6% 4
19.7% in 2009. The total income of the
GTB 43.7% 4 32.6% 12 -68.2% 24
industry more than doubled (from GH¢793 control its cost with a cost income ratio of
TTB 35.7% 5 35.1% 9 40.6% 5
million in 2007 to GH¢1.5 billion in 2009) over 50%,which is below the 63% industry SG-SSB 31.4% 6 30.6% 14 26.9% 9
the period. However the rapid deterioration of average. ZBL 30.9% 7 40.5% 2 3.6% 19
the industry’s loan portfolio adversely CAL 28.0% 8 31.2% 13 29.5% 8
impacted profit margins. Impairment charges Stanbic’s PBT margin shrunk the most in ABL 26.4% 9 34.5% 10 16.6% 14
for non-performing loans increased over the 2009 causing the bank to drop from 3rd to HFC 23.8% 10 32.6% 11 22.1% 12
three year period, from GH¢ 60 million in 2007 20th position. The fall was largely caused by IBG 15.4% 11 36.8% 8 1.2% 20
to GH¢266 million in 2009. a surge in impairment charge in 2009, which ADB 14.4% 12 18.3% 18 19.3% 13
increased from GH¢5 million to GH¢32 PBL 13.4% 13 24.6% 16 24.9% 10
million. UGL 12.8% 14 12.4% 20 6.6% 16
EBG lost its first ranking in 2009 as Baroda
Fidelity 11.7% 15 17.2% 19 5.1% 18
moved to the top position on profitability. ABG 9.9% 16 N/A N/A
Baroda had limited exposure to loans and UBA is recovering from its losses and GCB 9.8% 17 26.4% 15 31.6% 7
advances in 2009 and did not suffer the high posted a profit in 2009. FAMBL was unable MBG 9.7% 18 37.6% 5 5.1% 17
impairment charge facing most banks in the to recover its cost and now moves to join ICB 5.7% 19 37.5% 6 24.6% 11
industry. UTB and BBGL in the loss making group. Stanbic 4.2% 20 39.9% 3 49.9% 2
Overall, BSIC had the lowest ranking and UBA 4.2% 21 -64.9% 23 -14.0% 23
GTB’s performance over the survey period also failed to recover its operating costs in FAMBL -5.9% 22 22.5% 17 15.0% 15
was remarkable. The bank made significant the year. BBGL -13.8% 23 -6.3% 21 36.8% 6
UTB -14.9% 24 -64.7% 22 67.6% 1
strides by moving from 24th position in 2007
BSIC -229.5% 25 -124.2% 24 0.0% 21
to 4th position in 2009.
NIB N/A N/A N/A
Industry 19.7% 26.1% 30.4%
Smaller banks had higher net interest margins... Baroda maintained its lead ranking.
Net interest margin

Net interest margin
Interest on government securities remained Overall, UTB’s NIM shrunk most in 2009 2009 R 2008 R 2007(I) R
attractive for the three year period thus making it and resulted in the bank loosing its 2nd Baroda 13.2% 1 19.4% 1 0.0% 23
expensive for banks to attract depositors. As position to 8th position. GTB 12.4% 2 5.5% 21 3.2% 22
TTB 10.9% 3 10.1% 4 9.8% 3
depositors preferred investments in government
ABL, ZBL and FAMBL were the lowest BSIC 6.6% 14 17.2% 2 0.0% 23
instruments to bank deposits. That
BBGL 10.2% 4 8.6% 10 8.7% 9
notwithstanding, smaller banks managed to ranked in terms of NIM on the chart.
SG-SSB 10.2% 5 9.5% 6 8.8% 8
improve their net interest margin (NIM). Although all of these banks managed to
SCB 10.0% 6 8.7% 9 8.6% 10
increase their interest income appreciably MBG 9.5% 7 9.5% 7 9.0% 6
Baroda maintained its lead ranking due to its between 2007 and 2009, significant ABG 9.1% 8 N/A N/A
minimal asset base. The loans granted by the increase in interest paid to depositors UGL 7.9% 9 9.6% 5 8.9% 7
bank was less than 1% of the industry’s total impacted adversely on their NIMs. ICB 7.5% 10 7.1% 13 6.1% 18
loans and advances. GCB 7.4% 11 9.4% 8 9.4% 4
Stanbic 7.2% 12 7.5% 11 7.3% 12
EBG 7.0% 13 5.8% 19 6.6% 16
GTB increased its net interest income by five
HFC 6.3% 15 6.1% 16 9.1% 5
times from GH¢ 6 million in 2008 and GH¢ 29 m.
PBL 6.2% 16 6.6% 15 7.0% 14
The increase was driven mainly by interest ADB 6.2% 17 7.2% 12 7.0% 13
earned from loans and advances. Unlike most UTB 5.9% 18 11.6% 3 11.5% 2
banks, GTB’s investment in government UBA 5.8% 19 5.2% 22 12.8% 1
securities increased by only 3% in 2009 . CAL 5.7% 20 5.7% 20 6.1% 19
IBG 5.3% 21 5.8% 18 8.5% 11
Similar to Baroda, BSIC’s fourth ranking was as Fidelity 5.2% 22 3.8% 23 3.6% 21
result of its relatively small asset base. BSIC’s ABL 5.2% 23 6.6% 14 6.6% 17
total operating asset account for less than 1% of ZBL 4.7% 24 6.1% 17 4.7% 20
FAMBL 3.4% 25 3.7% 24 6.8% 15
the industry’s total operating assets.
NIB N/A N/A N/A
Industry 7.7% 6.6% 6.7%
Returns to shareholders
Industry Return on Equity reduced from 22% in 2008 to 12.1% in 2009
Return on equity (ROE) Return on equity

2009 R 2008 R 2007 R
The industry’s net spread did not change The increase in shareholders’ funds coupled SCB 36.0% 1 37.1% 5 37.4% 4
with a decrease in the industry’s profit after TTB 27.5% 2 32.5% 6 36.8% 5
significantly at 6.5% in 2009 compared to 6.7%
tax margin adversely affected ROE, leading EBG 26.4% 3 41.6% 3 37.5% 3
in 2008 as the increase in interest rates
to a drop from 22% in 2008 to 12.1% in ABL 24.1% 4 29.2% 8 10.5% 16
charged by banks on loans and advances was SG-SSB 17.8% 5 22.3% 15 19.8% 8
matched by increased cost of borrowing. The 2009.
HFC 17.2% 6 20.8% 16 16.1% 11
industry’s cost income ratio driven primarily by ZBL 16.9% 7 24.5% 12 11.3% 15
employee costs also remained constant at SCB appears to be consistent in bringing CAL 15.6% 8 22.5% 13 15.6% 12
63%. Profit after tax margin, however declined high returns to shareholders over the last IBG 14.3% 9 46.1% 1 -0.3% 22
from 20% in 2008 to 14.4% in 2009 mainly due three years, emerging with a ROE of 36% for PBL 13.8% 10 27.6% 9 23.8% 7
to declining loan asset quality. 2009, which is three times the industry GTB 13.8% 11 37.7% 4 -25.6% 24
average. SCB’s performance is reinforced by UGL 12.7% 12 8.4% 19 4.0% 18
By 31 December 2009 ten banks with majority the fact that its profit after tax of GH¢58 ADB 10.4% 13 13.7% 18 12.2% 14
foreign ownership had increased their stated million contributes 28% of the industry’s Baroda 10.4% 14 5.0% 20 0.0% 20
capital to at least GH¢60 million to meet the profit before tax. MBG 10.0% 15 42.5% 2 0.1% 19
minimum regulatory capital requirement. GCB 9.1% 16 18.2% 17 18.6% 9
Some of the local banks also increased their IBG and MBG recorded the highest ROE in Fidelity 6.4% 17 24.5% 11 5.7% 17
stated capital. This raised the industry’s stated 2008 but experienced significant declines in Stanbic 1.2% 18 32.2% 7 41.7% 2
in 2009, falling to 9th and 15th positions UBA 1.1% 19 -82.0% 24 -25.4% 23
capital from GH¢0.4 billion in 2008 to GH¢1.1
respectively. UBA improved on its 2008 ICB 0.7% 20 22.4% 14 13.0% 13
billion in 2009. The capital injection largely
ABG 0.6% 21 N/A N/A
contributed to the increase in the industry’s performance to generate a positive return in
FAMBL -9.5% 22 26.6% 10 17.9% 10
total shareholders’ funds from GH¢1.1 billion in 2009. BBGL -11.2% 23 -6.0% 21 32.2% 6
2008 to GH¢1.8 billion in 2009. UTB -21.1% 24 -41.2% 23 79.2% 1
BSIC, UTB, BBGL and FAMBL recorded BSIC -122.9% 25 -21.0% 22 0.0% 20
negative ROEs in 2009 because they were NIB N/A N/A N/A
unable to generate profits from their
operations during the year. Industry 12.1% 21.7% 22.2%
Asset quality
Asset quality of most banks deteriorated perhaps due to the adverse impact of the
global credit crisis on the economy
Impairment charge/ gross loans and advances

2009 R 2008 R 2007 R
The quality of banks’ loans and advances
The quality of Stanbic’s asset declined the UGL -0.3% 1 0.4% 6 1.6% 17
deteriorated in 2009. The industry’s average UTB -0.2% 2 12.2% 24 -18.9% 1
impairment charge for the year to gross loans most with a loan loss ratio of 10.9% compared
to the industry average of 4.2%. PBL 0.8% 3 0.4% 5 1.6% 16
almost doubled from 2.2% in 2008 to 4.2% in Fidelity 0.9% 4 0.1% 3 1.5% 15
2009. The cumulative impairment allowance to Baroda 1.0% 5 2.5% 19 0.0% 2
the gross loans worsened from 5.2% in 2008 to BBGL was the next in line with a loan loss ratio HFC 1.1% 6 1.6% 13 1.1% 9
8.2% in 2009. Increased cost of funds, of 9.8%, followed by MBG and UBA with a ratio SG-SSB 1.4% 7 2.1% 18 2.4% 20
inflation, depreciation of the Cedi and the delay of 9.6% and 8.6% respectively. CAL 1.5% 8 1.1% 9 1.4% 11
by government in paying contractors and other EBG 2.0% 9 1.4% 12 0.2% 5
GTB 2.0% 10 2.0% 17 1.4% 12
service providers were the key factors lenders
BSIC 2.1% 11 0.0% 1 0.0% 2
cited for the worsened asset quality.
TTB 2.4% 12 2.7% 20 1.7% 18
FAMBL 2.6% 13 1.1% 10 5.3% 22
The miscellaneous segment, which ABL 2.7% 14 1.1% 11 2.1% 19
includes personal loans, declined by 4% as GCB 2.8% 15 0.8% 7 0.1% 4
most banks tightened retail loan and consumer SCB 3.5% 16 0.4% 4 0.6% 7
credit. ADB 3.6% 17 1.7% 14 1.4% 13
ABG 4.0% 18 N/A N/A
The industry concentration indicates a shift IBG 5.0% 19 1.7% 15 3.3% 21
towards the utilities and construction sector ZBL 5.2% 20 0.9% 8 1.3% 10
ICB 6.2% 21 0.1% 2 1.4% 14
primarily due to the industry support in
UBA 8.6% 22 3.2% 21 6.0% 23
developing infrastructure in the
MBG 9.6% 23 5.4% 22 8.0% 24
telecommunication sector and rehabilitating the BBGL 9.8% 24 6.0% 23 0.8% 8
power sector. Stanbic 10.9% 25 1.8% 16 0.3% 6
NIB N/A N/A N/A
UTB and UGL improved on their loan
recoveries and reversed part of the impairment Industry 4.2% 2.2% 1.5%
charges incurred in previous years.
UGL, TTB and ABL led the way in loan portfolio profitability...
.
Impairment allowance/ gross loans and advances Loan portfolio profitability

2009 R 2008 R 2007 R 2009 R 2008 R 2007 R
Overall, the industry average for loan portfolio UGL 0.7% 1 4.2% 15 6.8% 19 UGL 27.0% 1 21.5% 1 14.1% 5
profitability improved by 3.1% between 2008 Fidelity 1.3% 2 0.8% 3 1.6% 8 TTB 25.3% 2 17.4% 5 16.5% 3
and 2009. This is attributable to the high Baroda 1.9% 3 2.8% 11 0.0% 1 ABL 22.2% 3 17.1% 6 11.3% 12
interest rates that prevailed during the period. BSIC 2.1% 4 0.0% 1 0.0% 1 HFC 22.0% 4 17.8% 4 16.7% 2
GTB 2.8% 5 2.4% 9 1.4% 5 PBL 21.4% 5 16.8% 7 14.0% 7
UGL continued to maintain its top position ABL 3.0% 6 1.8% 6 3.9% 16 CAL 20.9% 6 14.0% 9 14.0% 6
with a 27% loan portfolio profitability ratio ABG 4.0% 7 N/A N/A IBG 20.6% 7 10.9% 16 12.7% 9
(2008: 22%). Two other top performers were EBG 4.0% 8 2.3% 8 1.5% 7 FAMBL 20.2% 8 7.9% 20 11.3% 11
TTB with a loan profitability ratio of 25% GCB 4.0% 9 1.5% 4 1.3% 4 ZBL 19.9% 9 19.6% 2 9.7% 17
HFC 4.6% 10 3.8% 12 3.2% 12 GTB 19.3% 10 11.9% 14 10.6% 14
(2008:17%) and that for ABL of 22% loan
PBL 4.9% 11 3.9% 13 3.7% 14 Fidelity 18.1% 11 13.0% 11 5.4% 21
profitability ratio (2008:17%).
CAL 4.9% 12 4.1% 14 4.9% 17 SCB 18.0% 12 13.6% 10 14.8% 4
Notwithstanding the improved industry SG-SSB 5.0% 13 5.0% 16 6.2% 18 UTB 17.8% 13 4.1% 22 36.2% 1
average ratio, ICB, Stanbic and BBGL TTB 5.8% 14 5.4% 17 3.8% 15 BSIC 15.4% 14 3.3% 23 0.0% 22
experienced a downward trend in 2009. SCB 6.0% 15 2.6% 10 3.5% 13 GCB 14.6% 15 12.3% 13 9.8% 16
ZBL 6.3% 16 1.6% 5 1.5% 6 SG-SSB 14.5% 16 9.9% 18 8.5% 20
Twelve banks performed below the industry IBG 6.5% 17 1.9% 7 3.0% 11 EBG 13.8% 17 9.4% 19 9.3% 18
average of 15.7% with ADB, BBGL and UTB 8.1% 18 20.5% 24 30.2% 24 MBG 13.2% 18 12.8% 12 10.2% 15
Stanbic being the least performers. Stanbic 9.5% 19 5.5% 18 2.4% 9 ABG 13.0% 19 N/A N/A
UBA 13.1% 20 0.0% 1 0.0% 1 ICB 12.2% 20 18.8% 3 13.3% 8
ADB 14.7% 21 11.1% 22 13.7% 22 UBA 11.8% 21 -3.2% 24 -6.0% 24
FAMBL 17.6% 22 8.6% 20 17.4% 23 Baroda 11.2% 22 6.4% 21 0.0% 22
BBGL 17.7% 23 8.0% 19 2.6% 10 ADB 10.9% 23 10.1% 17 9.2% 19
MBG 21.1% 24 14.1% 23 10.3% 21 BBGL 10.3% 24 11.2% 15 11.2% 13
ICB 21.7% 25 10.5% 21 9.8% 20 Stanbic 8.4% 25 16.2% 8 11.7% 10
NIB N/A N/A N/A NIB N/A N/A N/A
Industry 8.2% 5.2% 4.6% Industry 15.7% 12.6% 11.1%
Liquidity
The industry’s liquidity, as measured by the rate of liquid funds to total deposits, edged up
significantly and remained fairly high...
Liquid funds/ total deposits

2009 R 2008 R 2007 R
The banking sector’s asset portfolio witnessed Fidelity dropped in ranking from 4th in 2008 to ABG 10.29 1 N/A N/A
15th in 2009. The bank’s deposit mobilisation Baroda 2.04 2 2.89 1 0.00 23
significant adjustments 2009. Most banks
ICB 1.52 3 0.84 4 0.74 5
shifted their focus from loans to government appears successful as deposits grew by 87%.
UBA 1.10 4 0.78 6 0.63 9
securities. The industry’s liquid assets to total Unlike the general industry trend the funds SCB 1.06 5 0.55 12 0.75 4
deposits increased from 0.53 in 2008 to 0.68 available were channelled to loans as the GTB 0.87 6 0.75 7 0.63 10
in 2009. loan book grew by 91%. EBG 0.82 7 0.58 10 0.62 12
CAL 0.77 8 0.70 8 0.84 3
ABG’s strong liquidity position is attributable
UGL, for the third year running, continued to ZBL 0.74 9 0.69 9 0.54 16
to the funds held from the initial capital
have relatively low liquid assets to total BBGL 0.68 10 0.44 17 0.43 20
injection at start up. The bank is at an early MBG 0.65 11 0.32 23 0.47 19
deposits ratio.
stage of mobilising deposits as part of its Stanbic 0.65 12 0.46 16 0.49 18
funds for operation. UTB 0.61 13 0.41 21 0.68 6
ADB 0.59 14 0.47 15 0.58 13
HFC’s liquidity was boosted in 2008 by the Fidelity 0.59 15 0.80 5 0.86 2
funds it held for third parties. On settlement of SG-SSB 0.57 16 0.41 20 0.63 7
these non interest bearing obligations in 2009 HFC 0.52 17 2.01 2 0.57 15
the liquid assets to total deposits ratio dropped TTB 0.52 18 0.43 19 0.63 11
in ranking from the 2nd to 17th. ABL 0.50 19 0.52 14 0.53 17
IBG 0.49 20 0.35 22 0.58 14
PBL 0.49 21 0.53 13 0.63 8
FAMBL 0.44 22 0.57 11 0.90 1
GCB 0.44 23 0.43 18 0.38 21
UGL 0.41 24 0.28 24 0.32 22
BSIC 0.30 25 1.82 3 0.00 23
NIB N/A N/A N/A
Industry 0.68 0.53 0.55
...ratio of liquid funds to total assets and total interest bearing liabilities respectively
exhibited similar trends
Liquid funds/ total assets Liquid funds/ total interest bearing liabilities
2009 R 2008 R 2007 R 2009 R 2008 R 2007 R
The ratio of liquid assets to total assets, and UBA 0.81 1 0.75 2 0.59 2 ABG 5.96 1 N/A N/A
liquid assets to total interest bearing liabilities ABG 0.77 2 N/A N/A Baroda 2.04 2 2.89 1 0.00 23
Baroda 0.69 3 0.85 1 0.00 23 ICB 1.12 3 0.73 6 0.68 5
for the industry edged up relative to 2008. Half
ICB 0.69 4 0.60 5 0.57 3 UBA 1.10 4 0.78 4 0.63 6
of the banks in the industry held funds in
SCB 0.64 5 0.42 12 0.56 4 GTB 0.87 5 0.75 5 0.63 7
excess of the industry’s average liquid assets ZBL 0.63 6 0.59 6 0.50 8 SCB 0.80 6 0.53 10 0.68 4
to total assets ratio of 0.48. EBG 0.60 7 0.44 11 0.47 10 EBG 0.76 7 0.53 11 0.56 10
GCB continues to be at the lower end of the GTB 0.55 8 0.68 3 0.52 7 ZBL 0.74 8 0.69 7 0.54 14
Stanbic 0.54 9 0.37 14 0.37 16 BBGL 0.67 9 0.44 14 0.42 17
pack as the bank has traditionally invested in
BBGL 0.53 10 0.38 13 0.37 17 Stanbic 0.63 10 0.43 15 0.41 18
more risky assets.
UTB 0.48 11 0.26 21 0.52 6 UTB 0.61 11 0.41 17 0.68 3
The industry ratio of liquid funds to total Fidelity 0.48 12 0.57 7 0.72 1 CAL 0.58 12 0.42 16 0.54 13
interest bearing assets increased from 0.48 in CAL 0.48 13 0.36 16 0.44 12 Fidelity 0.55 13 0.62 8 0.79 2
2008 to 0.60 in 2009 with ABG way above the MBG 0.47 14 0.23 23 0.32 19 MBG 0.54 14 0.27 23 0.38 19
ABL 0.44 15 0.45 10 0.44 13 SG-SSB 0.53 15 0.36 20 0.54 12
industry’s average ratio. The ratio of Baroda,
FAMBL 0.38 16 0.51 9 0.55 5 ABL 0.50 16 0.51 12 0.53 15
ICB and UBA were also way above the ADB 0.49 17 0.35 21 0.52 16
SG-SSB 0.38 17 0.28 20 0.42 15
industry average ratio. IBG 0.38 18 0.31 17 0.48 9 TTB 0.48 18 0.39 19 0.61 8
TTB 0.37 19 0.30 18 0.43 14 IBG 0.47 19 0.35 22 0.58 9
PBL 0.36 20 0.37 15 0.46 11 FAMBL 0.42 20 0.57 9 0.89 1
UGL 0.35 21 0.22 24 0.25 22 PBL 0.42 21 0.46 13 0.54 11
ADB 0.34 22 0.24 22 0.33 18 UGL 0.40 22 0.27 24 0.31 22
GCB 0.29 23 0.30 19 0.29 20 GCB 0.35 23 0.39 18 0.37 20
HFC 0.28 24 0.57 8 0.29 21 HFC 0.34 24 1.24 3 0.34 21
BSIC 0.24 25 0.66 4 0.00 23 BSIC 0.30 25 1.82 2 0.00 23
NIB N/A N/A N/A NIB N/A N/A N/A
Industry 0.48 0.39 0.41 Industry 0.60 0.48 0.50
Glossary
Glossary of key financial terms, equations and ratios
Capital adequacy ratio is the ratio of adjusted equity base to risk adjusted asset base as required by the Bank of Ghana (BoG)
Cash assets includes cash on hand, balances with the central bank, money at call or short notice, and cheques in course of collection and clearing
Cash ratio = (Total cash assets + Total liquid assets) / (Total assets - Net book value of fixed assets - Investments in subsidiaries and associated companies)
Cash tax rate = Actual tax paid / Net operating income
Cost income ratio = Non-interest operating expenses / Operating income
Current ratio = (Total assets - Net book value of fixed assets – Investments in subsidiaries and associated companies) / (Total liabilities - Long term borrowings)
Dividend payout ratio = Proposed dividends / Net profit
Dividend per share = Proposed dividends / Number of ordinary shares outstanding
Earnings per share = After tax profits before proposed profits / Number of ordinary shares outstanding
Financial leverage ratio = Total assets / common equity
Liquid assets includes cash assets and assets that are relatively easier to convert to cash, e.g., investments in government securities, quoted and unquoted debt and equity investments, equity
investments in subsidiaries
Loan loss provisions and associated
= (General companies
and specific provisions for bad debts + Interest in suspense) / Gross loans and advances
Loan portfolio profitability = (Interest income attributable to advances - Provisions for bad and doubtful loans) / Net loans and advances
Loan loss rate = Bad debt provisions / Average operating assets
Net book value per share = Total shareholder's funds / Number of ordinary shares outstanding
Net interest income = Total interest income - Total interest expense
Net interest margin = Net interest income / Average operating assets
Net operating income = Total operating income - Total non-interest operating expenses + Depreciation and amortisation - Loan loss adjustment + Exceptional credits
Net operating (or intermediation) margin = [(Total interest income + Total non-interest operating revenue) / Total operating assets] - [Total interest expense / Total interest-bearing
liabilities]
Net profit = Profit before tax - Income tax expense
Net spread = (Interest income from advances / Net loans and advances) - (Interest expense on deposits / Total deposits)
Non-interest operating expenses include employee related expenses, occupancy charges or rent, depreciation and amortisation, directors emoluments, fees for professional advice and
services, publicity
Non-interest and marketing
operating expensescommissions and fees, profit on exchange, dividends from investments and other non-interest investment income, and bank and service charges
revenue includes
Non-operating assets comprises net book value of fixed assets (e.g., landed property, information technology infrastructure, furniture and equipment, vehicles) and other assets, including
prepayments,
Operating sundry
assets debtors
include and
cash accounts
and receivable
liquid assets, loans and advances, and any other asset that directly generates interest or fee income
Operating income = Net interest income + Non-interest operating revenue
Profit after tax margin = Profit after tax / Total operating income
Profit before tax margin = Profit after extraordinary items but before tax / Total operating income
Quick (acid test) ratio = (Total cash assets + Total liquid assets) / (Total liabilities - Long term borrowings)
Return on assets = Profit after tax / Average total assets
Return on equity = Profit after tax / Average total shareholders' funds
Shareholders' funds comprise paid-up stated capital, income surplus, statutory reserves, capital surplus or revaluation reserves
Total assets = Total operating assets + Total non-operating assets
Total debt ratio = Total liabilities / Total assets
Our profile
About us
PricewaterhouseCoopers provides industry-focused Our industry focus

assurance, tax, and advisory services to build public trust Our approach to delivering these services involves developing
and enhance value for its clients and their stakeholders. deep expertise and understanding of the industries in which
More than 155,000 people in 163 countries across our our clients operate. We have established specialised groups
network share their thinking, experience and solutions to of consultants and advisers covering the following key
develop fresh perspectives and practical advice. sectors:
+ Financial Services
Our key service offerings
+ Government Services
We organise our service offerings into Lines of Service, with
+ Consumer and Industrial Products and Services
highly qualified, experienced professionals, who have
industry specific experience and focus: + Energy and Mining
Assurance — providing solutions to organisations’ financial + Telecoms

control, regulatory reporting, shareholder value and + Infrastructure
technology issues
+ Transport – airports/aviation, seaports, road and rail
Advisory — providing comprehensive financial, economic,
and strategic advice to organisations with complex business
problems
Tax — formulating effective strategies for optimising taxes,
implementing innovative tax planning, and effectively
maintaining compliance.
49
In Africa, PricewaterhouseCoopers firms have established 57 permanent In Ghana, PricewaterhouseCoopers has seven partners and
offices employing more than 6,000 professional staff located in 29 directors and over 199 employees. The firm in Ghana
countries. we believe that we are the only professional services firm that provides the same services as any firm in the network of
can offer the highest level of quality services in every country in Africa. firms of PricewaterhouseCoopers, i.e. assurance, tax and
From these strategically located offices we provide a range of professional advisory services, and in accordance with the same
business advisory services to Governments, Non-Governmental professional standards adopted by the worldwide.
Organisations, international funding institutions governments and leading
The Ghana firm has unrestrained access to the networks
global and national companies.
vast resource base of proprietary knowledge and
Our permanent offices in Africa can be found in: methodologies, and experience.
Our clients include the most prominent private sector
businesses – both multinational and national; most
government institutions – at national and local levels; and the
major international financial institutions.
PricewaterhouseCoopers in Africa
Algeria Madagascar
From Ghana, the firm services clients located in or with
Angola Malawi business and development interests in Sierra Leone, Liberia,
Botswana Mauritius and The Gambia.
Burundi Morocco
Cameroon Mozambique Part of our proud achievements include the prominent roles
Central African Republic Namibia we have played in supporting governments to implement
Chad Nigeria
Congo, Democratic republic of Rwanda*
challenging major reform initiatives across the continent.
Congo, Republic of Senegal
For instance, we have advised on public sector institutional
Cote d’Ivoire South Africa
Egypt Sudan
restructuring and organisational development, public sector
Ethiopia* Swaziland reform, liberalisation and privatisation of utilities and
Francophone Africa Tanzania infrastructure sectors, liberalisation of financial markets, and
Gabon Tunisia
Ghana
modernisation of tax, customs and exchange control
Uganda
Guinea Zambia regimes.
Kenya Zimbabwe
Libya
* through associate firms
collaboration with
Contact us (www.pwc.com/gh)
PRICEWATERHOUSECOOPERS GHANA GHANA ASSOCIATION OF BANKERS
Dan Mensah
Felix Addo Country Senior Partner (Direct Line 761355) – felix.addo@gh.pwc.com Executive Secretary
4th Floor, SSNIT Tower Block
ASSURANCE (Near Pension House) Accra
Mark J Appleby Partner (Direct Line: 761623) – mark.j.appleby@gh.pwc.com P O Box 41, Accra, Ghana
Michael Asiedu-Antwi Partner (Direct Line: 761533) – michael.asiedu-antwi@gh.pwc.com Phone: +233 (21) 670629
Oseini Amuii Director – oseini.x.amui @ gh. pwc.com Telefax: +233 (21) 667138
Email: assbankers@ighmail.com
Sarah-Mary Frimpong Senior Manager – sarah.frimpong@gh.pwc.com

James Karanja Senior Manager – james.karanja@gh.pwc.com
Maxwell Darkwa Senior Manager – maxwell.darkwa@gh.pwc.comm
ADVISORY
Wyczynsky Ashiagbor Partner (Direct Line 761465) – vish.ashiagbor@gh.pwc.com
Felix Tamattey Partner – felix.tamattey@gh.pwc.com
Eric Nipah Director – eric.nipah@gh.pwc.com
SYSTEMS PROCESS ASSURANCE

David Brocke Senior Manager – david.brocke@gh.pwc.com
HUMAN RESOURCE SERVICES AND TRAINING

Aaron Goza Senior Manager – aaron.goza@gh.pwc.com
TAX SERVICES
Darcy White Partner (Direct Line 761576) – darcy.white@gh.pwc.com
George Kwatia Director – george.kwatia@gh.pwc.com
Francis Adiasani Senior Manager – francis.adiasani@gh.pwc.com
© 2010 PricewaterhouseCoopers Inc. All rights reserved. PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate
and independent legal entity. PricewaterhouseCoopers Inc. is an authorised financial services provider.
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Ghana Banking Survey 2010

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Ghana Association of Bankers

Risk Management in well

Section one of this report focuses on exposures arising from

It is our hope that this publication continues to inform and engender

Banking executives are trying to avoid being blindsided

At the same time, these executives are wondering “do we truly

Managing risk in a changing environment

Managing risk in the changing environment Conclusion

Between December 2008 and December 2009, the benchmark 91-

Introduction of the “cheque code-line clearing system”

Quartile Grouping Operating Assets (In billions of Cedis)

banks according to the value of operating assets held at 31 70%

0% 0.2 0.1 0.1

Source: Bank’s Financial Statements & PwC Analysis

Net loans and advances continued to constitute a greater proportion of industry’s

Trends in operating assets

Industry 12,428,252 9,579,783 6,847,071

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

Fourth Quartile Banks

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

2009 2008 2007 2009 2008 2007

Share of industry total assets Share of industry total assets

Industry 100.0% 100.0% 100.0%

Share of industry deposits Share of industry deposits

Industry 100.0% 100.0% 100.0%

Share of industry gross loans and advances

Industry 100.0% 100.0% 100.0%

Profit before tax margin

Industry 19.7% 26.1% 30.4%

Net interest margin

Industry 7.7% 6.6% 6.7%

Industry Return on Equity reduced from 22% in 2008 to 12.1% in 2009

Return on equity (ROE) Return on equity

Impairment charge/ gross loans and advances

Impairment allowance/ gross loans and advances Loan portfolio profitability

Industry 8.2% 5.2% 4.6% Industry 15.7% 12.6% 11.1%

Liquid funds/ total deposits

Industry 0.68 0.53 0.55

Industry 0.48 0.39 0.41 Industry 0.60 0.48 0.50

Glossary of key financial terms, equations and ratios

PricewaterhouseCoopers provides industry-focused Our industry focus

Assurance — providing solutions to organisations’ financial + Telecoms

PRICEWATERHOUSECOOPERS GHANA GHANA ASSOCIATION OF BANKERS

Sarah-Mary Frimpong Senior Manager – sarah.frimpong@gh.pwc.com

SYSTEMS PROCESS ASSURANCE

HUMAN RESOURCE SERVICES AND TRAINING

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